Sunday, October 30, 2005

Seasonality

Much of what I write in this place is advice that is well researched and tested by blood, sweat, and tears. Today I take on a topic which I know a lot about, but which continues to be a thorn in my side. From talking to many of you, I know that most, if not all, advertising specialty professionals also fight the battle of revenue fluctuation by season.

As of today, our company only sells bicycle style water bottles. If this product was only used by bicyclists on bicycles, it would be pretty clear that sales would be much stronger in warm months than in cold. However, as this product became a major player in the promotional products industry, the usage changed dramatically. Our bottles are now seen in gyms, offices, warehouses, kitchens, living rooms, and autos. They are used by golfers, toddlers, walkers, oldsters, and even teenagers. Our largest end user categories are home centers, pharmaceuticals, insurance companies, banks, transportation companies,military recruitment, and fast food chains.

So we thought (silly us) that our seasons would flatten out. Honda should need just as many bottles in January as they do in July. Of course, many of you could have warned us that November to February is not so terrific for mugs or pens either.

So what are the answers? Do we get used to the idea that we will buy our Christmas gifts on credit cards that offer no interest/no payments until April? Here is my short list. I'd be interested in hearing what you've come up with.

1. To some extent we may have to live with seasonality. That may mean that we lower overhead during those months, or that we squirrel away money during the good days.

2. Offer discounts to major customers who will warehouse product for year round use anyway. We have several customers who buy 100,000 or more bottles per year. We offer them better pricing to take product October-February when our equipment and people might otherwise be idle. This frees up our resources for those who can only take product in season.

3. Develop specific off season markets. For water bottles we found that gyms, schools, military recruiting, and retail promotions were year round businesses. We put more emphasis on these groups. This year we have started to develop concepts that turn water bottles into gifts, greeting cards, and calendars.

4. Get a part time job at Macy's for the Holidays. (Just kidding.) But that is my whole list of ideas. This blog can be a place where we in the industry share ideas that can benefit everyone. So just hit the comment button and tell us how you manage your off season.

1 comment:

kyle phillup said...

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Sweet job, you should keep working on this.
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:-) have a nice day.